MPM755 – Building success in commerce

Group Assignment

Trimester 2, 2017

Group Number: 8

Name ID Proportion

YUEXUAN WU 215466021 20%

RUXUE HAN 215358886 20%

YIDAN ZHU 215158947 20%

ZITONG CHENG 214298817 20%

LU LI 214504896 20%

Word count: 5408

Task Completion Document

Member 1Name: YUEXUAN WUID: 215466021Completed tasks: Writing background, future prospects and conclusion in the research paper,

including internal and external analysis; Designing and making business official website; Checking reference list and appendix; Brainstorming and exchanging information relating business plan with team

members.

Member 2Name: RUXUE HANID: 215358886Completed tasks: Writing branding parts including core values, business name, corporate identity as

well as media presence in the research paper; Conducting graphic designs relating to logo, business cards, and app interface; Brainstorming and exchanging ideas relating business plan with team members; Organizing group discussion and constructing the whole research.

Member 3Name: YIDAN ZHUID: 215158947Completed tasks: Writing marketing parts, including 5Cs and the PESTEL framework, as well as

SWOT analysis in the research paper; Checking reference list and appendix; Constructing the whole research and modifying writing errors; Brainstorming and exchanging ideas relating business plan with team members.

Member 4:Name: ZITONG CHENGID: 214298817Completed tasks: Writing operation parts including organizational structure, business process and

risk management, as well as market strategy in the research paper;

Checking reference list and appendix; Constructing the whole research and modifying writing errors; Brainstorming and exchanging ideas relating business plan with team members.

Member 5:Name: LU LIID: 214504896Completed tasks: Writing finance parts, including business cost and revenue analysis as well as

financial outlook in the research paper; Checking reference list and appendix; Constructing the whole research and modifying writing errors; Brainstorming and exchanging ideas relating business plan with team members.

Signatures:

Member 1.

Member 2.

Member 3.

Member 4.

Member 5.

Contents

1. Background...........................................................................................................6

2. Branding................................................................................................................7

2.1 Core Values.....................................................................................................7

2.2 Brand name.....................................................................................................7

2.3 Corporate identity............................................................................................7

2.4 Style guide.......................................................................................................8

2.5 Final logo.........................................................................................................8

2.6 Media presence.............................................................................................10

3. Marketing.............................................................................................................11

3.1 Internal analysis of SHARIDE........................................................................11

3.1.1 Company..............................................................................................11

3.1.2 Competitors.........................................................................................12

3.1.3 Customers...........................................................................................13

3.1.4 Collaborators.......................................................................................14

3.1.5 Context................................................................................................14

3.2 External analysis of SHARIDE......................................................................15

3.2.1 Political................................................................................................15

3.2.2 Economic.............................................................................................15

3.2.3 Social...................................................................................................15

3.2.4 Technology...........................................................................................15

3.2.5 Ecological............................................................................................16

3.2.6 Legal....................................................................................................16

3.3 SWOT Analysis..............................................................................................17

3.4 Market strategy..............................................................................................17

3.4.1 Online market strategy........................................................................17

3.4.2 Offline market strategy........................................................................18

4. Operation.............................................................................................................18

4.1 Organizational structure................................................................................18

4.1.1 IT department......................................................................................19

4.1.2 Marketing department..........................................................................19

4.1.3 Financial department...........................................................................20

4.1.4 Customer service department.............................................................20

4.1.5 Human resource department...............................................................20

4.2 Business process..........................................................................................21

4.2.1 Before use...........................................................................................21

4.2.2 How to use our service?......................................................................22

4.3 Risk management..........................................................................................23

4.3.1 Regulatory risk.....................................................................................23

4.3.2 Operational risk...................................................................................23

4.3.3 Financial Risk......................................................................................23

5. Finance................................................................................................................24

5.1 Startup Costs.................................................................................................24

5.2 Maintain-operating costs...............................................................................25

5.3 Main Revenue...............................................................................................26

5.4 Additional revenue.........................................................................................27

5.5 Financial outlook............................................................................................28

6. Future prospects..................................................................................................28

7. Conclusion...........................................................................................................29

8. References:.........................................................................................................30

9. Appendix:.............................................................................................................33

1. Background

Throughout the centuries, the transportation has played a vital role in human

society. Dating back to the year 1886 where the first modern car Benz Patent-

Motorwagen was invented by Karl Benz (daimler 2017), or the year 1903

where the Wright Brothers let the first airplane fly in the air for the first time.

There is no doubt that the transportation has bring the tremendous

convenience to the human, and it is the base for society developing. At the

year 2008, Travis Kalanick and Garrett Camp came up with a new idea that

changed the way how people get the ride and established the company

named UBER (uber 2017).

For the country, Australia, which is the country has the most livable city in the

world. It is city Melbourne who has won the most livable city for 7-year running

(Chalkley-Rhoden 2017). Id (2016) indicates that almost half of the Australian

households owned two or more motor vehicles in 2016. Therefore, it is very

common to see a local Australian student go to university by car. However,

this is not the case for some international students, take Deakin university for

example, they usually choose public transportation for attending the class.

Compared with private cars, the local public transportation in Australia is quite

inconvenient. International students need to be organized in time to catch

each bus. Therefore, we want to bridge a platform to connect the students

who have car and students who do not own a car within Deakin University.

Especially the concept of the sharing, which is one of the megatrends of the

global is becoming popular currently, such as the OFO in China and Sidecar

in the US.

2. Branding

2.1 Core Values

Trying to demonstrate a fantastic innovative conception and pattern of

commuting. Unlike the traditional means of transportation like bus and taxi,

SHARIDE focuses more on providing a ride-sharing service with innovation,

efficiency and cooperation in real terms for the highly-crowded personnel

among educational institutions.

2.2 Brand name

The name SHARIDE is clearly a new compound word of ‘share’ and ‘ride’,

which has been positioned to convey the ethos of our business, not only filling

up the underutilized seats in moving vehicles, but also dealing with

commuting troubles and even social issues related.

2.3 Corporate identity

At SHARIDE, we acknowledged that at Deakin University, the majority of

Deakin members seemed more concerned with affordable commuting in a

convenient high-effective manner, travelling to and from school. In this matter,

we believe that SHARIDE could earn great confidence initially targeting a

customer base comprised of Deakin students and staffs at Burwood campus

by showing our efforts to create for them a sense of cost effectiveness on the

way, thereby devoting to their scholastic or professional achievements without

worrying about the high costs of fare and lengthy commuting times.

It is worth to notice that, the SHARIDE branding strategy is aimed to create a

perfect platform for Artificial Intelligence for in-time ride-sharing services,

making it possible to optimally pair potential passengers with available drivers

and promote mutual benefits between the both. To better put mission into

practice, SHARIDE especially adapts to meet the unique needs of the

community it serves with introducing a fresh service concept of innovative

collaboration, intending to lend fresh impetus to the growth of student/staff

relations during carpooling.

Further, considering that after all the positive disruptions, current

transportation infrastructures still waste a huge amount of time, energy and

effort moving empty seats from place to place, SHARIDE brightens its vision

to a higher social level that seizes the program potentials as an opportunity of

commuting transformation. Additionally, as for the long-term market

positioning, SHARIDE would positively reinforce the concept of sustainable

development, balancing economic development, environmental concerns and

social equity in priority-setting.

2.4 Style guide

The visual style guide of SHARIDE has been developed by company director

and designer, which establishes guidelines with respect to the brand

management, corporate identity, as well as the business card and website

design. All platforms, both digital and physical would employ a consistent

graphic identity that reflects the core values of the brand.

2.5 Final logo

Figure 1

As for the logo design, it comprises two vital elements: one square in the

middle represents our service target educational institutes such as Deakin

University; four pairs of branching structures reference our fresh commuting

concept of innovation, efficiency, cooperation and share. Not just advocating

ride-sharing, the logo also carries the meaning of creating your social network

with SHARIDE.

More remarkably, to adapt to targeting customers’ preference, we also employ

a full set of colors (figure 2) allowing for many variances with logo and then

use them to create exclusive business cards and stationery (figure 3).

Figure 2

Figure 3

2.6 Media presence

To operate in concert to guarantee the maximum exposure and visibility of the

brand, the SHARIDE marketing strategy is designed with making the full use

of the internet, creating platforms and presenting to potential customers with a

real sense of sharing and serving concept as

well as a fresh way of commuting.

Providing a good human-machine interface

with excellent compatibility and expansibility,

the application (APP) developed is likely to

be the most practical and user-friendly

platform, with which users could easily get

access to the ride-sharing information

among Deakin range using whatever smartphones, tablets or other devices

(figure 4 &5). And, more remarkable, the platform employs a consistent

graphics style, and the logo is boldly positioned on the top middle of the

interface, which could impress potential customers and contributes to the

brand promotion.

Apart from APP, SHARIDE also establishes an official website geared towards

potential customers at Deakin University, which to a great extent expands

media outreach and increases social media presence of the company.

Compared to APP, the website platform serves a particular purpose in the

branding strategy, focusing more on conveying to platform-users the brand

story, core values and the new commuting concept we advocated. It is worth

noting that to promote our branding where sharing rides along the same or

similar lines to and from universities is an easy way to save and make

buddies, a spotlight promotion video has also been made and put inside the

company’s official website.

Figure 5

3. Marketing

‘The analysis of 5Cs framework is an environmental scan on five key areas

especially applicable to marketing decisions (NetMBA.com 2010)’. In order to

identify the marketing environment of Deakin Ride Sharing, it is necessary to

understand the business’ internal and external situation. Therefore, the

following market research will analyze critically via using 5Cs and the PESTEL

framework, as well as, including SWOT analysis.

3.1 Internal analysis of SHARIDE

3.1.1 Company

SHARIDE is a ride-sharing app which is focused on the staff and students of

Deakin University, which is founded by five directors in Melbourne, Australia in

2017. The SHARIDE is including two objects which are providing and

receiving a ride sharing. The ride-sharing platform aims to encourage people

with Deakin ID to choose a sustainable ride alternative such as sharing a car

with people who have the same place of departure and destination. And this

platform will be provided by this app. The initial goal of the SHARIDE is to

provide a convenient environment to go to school for people who are working

and studying at the Deakin University. According to this app, the serious

parking situation on campus will be reduced and the transport cost of going to

school will be also decreased. Moreover, it is good for making friends. Our

business has $20,000 (AUD) in start-up capital. Although the initial capital is

not very much, our business is an online operation, which means we own

enough money to support IT management.

3.1.2 Competitors

There are many options to go to the Deakin campus for staffs and students to

choose. Public transport vehicle, Uber is the major competitors for our

business entry this market. Comparing with these two competitors, it is clear

that they all have limitations in their area. Moreover, the goal of our business

is providing customers a convenient, safe riding environment and a cheap

riding price, giving a chance to make more friends.

Figure 6 Comparison with the price and time of several different transportations

(Source: https://www.rome2rio.com/s/221-Burwood-Hwy-Burwood-VIC-3125-

Australia/Doncaster-East)

In order to make a clear comparison among these three objects, we choose a

route between Deakin University and Don caster East. The next step is to

compare their price and time. Under the same mile, the public vehicle uses

the longest time, and need to pay a middle price. Although, driving a private

car spends the same time as taking an Uber. The price of taking an Uber is

more expensive than driving the private car, which approximately six to nine

times.

On the other hand, there are many bus station with different routes around the

Deakin University. However, the bus comes three times per hour averagely

from Monday to Friday. Even there is only once per hour on both Saturday

and Sunday; what is more, some routes even do not provide bus on weekend,

which is not convenient for staff and students especially. In terms of Uber, it is

quick and convenient than taking a bus, you can order on the app. Due to the

driver who mainly benefits from Uber driving, the payment of choosing this

kind of transport tool is actually much higher. It is not suitable for customers

who cannot afford, because they may use this kind of vehicle go to school

every day, which can be a huge expenditure.

After keeping a comparison with two competitors, our business is relatively

having an advantage for staffs and students in Deakin University. However,

Bus as the public vehicle is the mainstream for people to take, moreover, the

Uber has entered this market for a long time, which has a great reputation and

been performing well. Therefore, it is necessary for our business to critically

learn advantages from them.

3.1.3 Customers

Currently, the SHARIDE app is eligible for people who are working and

studying at Deakin University. It can be downloaded for free from the App

Store and the Google Store, and customers should use the ID number of

Deakin University to register. In the current period, our business aims to

provide a more convenient riding environment for customers in Deakin

University.

3.1.4 Collaborators

It is obvious that our business need to receive a support from the Deakin

University. The current purpose of this business is to provide service for staff

and students of the Deakin University. Therefore, we must cooperate with the

Deakin University. The reason is that a university as a collaborator means that

a higher advertising believability, which also brings a positive effect on the

corporate's value (Chan, Chan & Tang 2017). Besides the higher believability

of our business, the support from a university is able to guarantee the safety

of the customers.

Additionally, IT engineers play a crucial role in developing the Deakin ride-

sharing. They have to exploit and maintain the system of this app, which tries

their best to ensure operating well.

3.1.5 Context

(NetMBA.com 2010) states that the context of one of the 5Cs framework is

connected with the macro-environmental factors facing the business. There is

total 28,286 number of student and 1,500 number of staffs on Burwood

Campus. However, there is only 3,441 car spaces on this campus

(deakin.edu.au 2017b). It is obvious that car parking on Burwood campus of

Deakin University is limited and in high demand, especially in Trimester one

and two, which is difficult for staff and students finding a car park

(Deakin.edu.au 2017a). Under this kind of environment, reducing high

demand of finding a car park on campus is one of the goals of our business.

Furthermore, universities are encouraging their student to make innovation,

our business could be highly supported by the target campus.

3.2 External analysis of SHARIDE

3.2.1 Political

In order to encourage develop more small businesses, the Australian

Government starts to proceed The Entrepreneurs’ Program to give a small

scale of businesses business advisers and practical support (business.gov.au

2017). According to the relative program from the Australian Government, our

business has a great political environment to develop.

3.2.2 Economic

The Australian Competition & Consumer Commission (ACCC 2017) points out

that the petrol price of the five largest cities (i.e. Sydney, Melbourne, Brisbane,

Adelaide and Perth) is increasing by 7.8 cents per liter (cpl) to 122.0 cpl from

2015 to the half first year of 2017. Therefore, more and more people reduce

driving a private car to go to school.

3.2.3 Social

ENGINEERSAUSTRALIA (2016) states that Melbourne has already

performed worst about traffic congestion which is correlated with a rapid

growth of population, especially in the major route surrounding university.

Moreover, we can see from the 2016 annual report of Deakin University

(2016) that the number of the students of the Burwood campus is increasing

continuously for the recent five years. According to this situation, encouraging

people to choose car sharing and other strategies are effective methods to

face the current traffic congestion (GIZMODO 2015).

3.2.4 Technology

The IT skills play a majority role in developing the Deakin ride-sharing app.

This is because that our business is proceeding an online business strategy,

which needs an accurate IT technology and data information. Additionally, the

close connection between technology skills and all functions of our app is

crucial for the integrated progress of our business. In a word, the technology

is the main element for developing the SHARIDE.

3.2.5 Ecological

In 2010, road transport has contributed 83.2 Mt CO2, which is 15.3 % of the

Australia’s net emissions (GIZMODO 2015). It points that the CO2 emissions

from road transport has become an urgent problem for the environment.

Nevertheless, the SHARIDE means that the number of using the private car

will reduce, which can decrease the CO2 emissions. Therefore, the SHARIDE

will be popular by people.

3.2.6 Legal

The damage to a vehicle when it is used to carry passengers for payment is

not included in the comprehensive car insurance policies in Australia

(donnellys.com.au 2016). The aim of this law is to attack illegal phenomenon

of the profitability of the private cars by the Australian government. However, it

will reduce the safety of riding share way, which affects the development of

this industry negatively.

All in all, we analyzed the internal and external environment of the SHARIDE

using the 5Cs framework and the PESTEL framework in the marking section.

Through an integrated research of the marketing environment from the

political, economic, social, technological and ecological aspects, it can help us

to find potential threatens and opportunities. Therefore, it can be clearly found

that an excellent external environment of developing is provided.

3.3 SWOT Analysis

Strengths Weaknesses

1. Flexible route

2. Automatic positioning

3. No limited time

4. The goal of achieving green ride

1. Initial capital not very much

2. Random cars’ style

3. Position of the departure and

destination might be inaccurate

4. The market scale of using this

app is small

Opportunities Threats

1. Competitive advantage

2. An increase demand of parking

situation

3. An increase willingness and

requirement to communicate with

strangers

1. Not big profits

2. Management risk

3. Unpredictable issues

3.4 Market strategy

The initial business target of SHARIDE is that provides a convenient way for

DEAKIN students and staff to travel, therefore, we decided to put up posters

in DEAKIN Burwood campus, nearby shopping centres and bookstores. In

addition, we will use YouTube and Facebook to advertise online.

3.4.1 Online market strategy

The placement of advertisements on the campus can help convey the

information to the target customer - there is a safe and convenient service for

campus share riding and welcome to forestall to experience. According to

data collected by internet world stats (Internetworldstats 2017), there are

21million Internet users in Australia's 24million population and 69% of Internet

users have a facebook account. Thus, information can be quickly and widely

publicized on the Internet, people can view ads on social media anytime,

anywhere via website or mobile terminal. Therefore, the photo and video

advertisements on YouTube and Facebook can effectively and quickly

publicize our business. At the same time, advertising campaigns can

effectively enhance the visibility of our brand and will help us expand our

business to other Melbourne’s campuses in the future.

3.4.2 Offline market strategy

Proposing the partnership between different stakeholders as a marketing

strategy can keep pace with the development of business (Muhammad Haq

2014). In addition, partnership marketing as a highly efficient market strategy

can create much value for a new business, this is because the mature

business of partnership has a stable customer base in the market (Caligiuri

2012). Therefore, we would like to cooperate with DUSA (Deakin University

Student Association) and attract their members to use our services. SHARIDE

posters will be put up in populated areas on campus. At the same time, the

coupons with QR codes will be sent to customers in cafes and DUSA

bookstores, which will improve brand awareness and attract potential

customers

4. Operation

4.1 Organizational structure

SHARIDE is founded by five people, they will be directly involved in each

department's day-to-day business management and control in accordance

with their professional background. SHARIDE will be registered as a limited

company, and it is going to develop a campus car-sharing system by

cooperating with the university. There is no doubt that competitive advantages

will be brought to the business if there is a connection with the school, such

as the increase of advertising credibility, the easiness of product promotion,

and the safety and reliability of the project through stable supervision of the

school.

We will employ staff to conduct regular day-to-day maintenance and

management after the approval of campus car sharing system. Since there

are few employees in the initial stage, we adopt a flat organizational structure

to improve the efficiency of the company's self-governance. The company

consists of five departments: IT department, marketing department,

accounting department, customer service department and human resources

department.

4.1.1 IT department

Employees in the IT division are responsible for designing website and

developing the APP. The company provides users with online communication

platform currently, which consists website and APP, where users can choose

to provide or receive shared automotive services.

In order to provide a better user experience, staffs in technology department

must regularly maintain internal servers, update applications in a reasonable

time to fix bugs so as to continuously enhance service satisfaction.

4.1.2 Marketing department

Marketing personnel needs to plan and publicize in diverse strategies for the

product launch so as to promote the campus car sharing system to social

media and make more people understand and accept the services provided

by the company.

4.1.3 Financial department

The financial department is responsible for overseeing the inflow and outflow

of funds in the daily operations of the company. They need to collect and

calculate the payment of passengers as well as pay the driver's fee on time so

as to form a stable business cycle. Moreover, they also need to ensure to pay

all employees’ salaries and benefits on time, regularly prepare financial

statements and declare tax information to prevent theft and fraud within the

company so as to reduce internal risks.

4.1.4 Customer service department

Customer service department mainly needs to collect and examine the mutual

evaluation information between users and to collect evaluation and

suggestion to the company from different stakeholders. The person in charge

of the department needs to collect and review the user's mutual evaluation

information in each order, as well as punish the users with a high poor rate of

assessment, such as freezing the account.

In addition, the company also must pay attention to the feedback from

customers and employees besides providing quality services so as to

maintain a positive relationship with stakeholders. Therefore, after-sales

service department will sincerely receive suggestions, criticism and praise

from all customers, employees and stakeholders, criticism and praise so as to

continuously improve the company's service, establish a company with good

reputation and sustainable development.

4.1.5 Human resource department

HR department is an important part of the company, it is mainly responsible

for managing human resources, selecting and training excellent talents for the

company. The Department is responsible for recruiting and training new

employees to ensure that all of our staffs adhere to corporate values and

vision. At the same time, human resources department is also responsible for

supervision and management of staff performance and improving the work

enthusiasm of staff to reduce the problem of agency. SHARIDE provides full-

time work for the employees. The salary is paid weekly and is transferred

directly to the employee's bank account. If the company receives a profit at

the end of the financial year, the employees also will receive bonus

accordingly.

4.2 Business process

4.2.1 Before use

Users can download mobile applications and register as members for free

through app store. Users who are passengers need to provide the student or

staff ID of DEAKIN and bind their credit cards as payment tool to complete the

registration. However, it is worth noting that users who apply to become

drivers should meet the following conditions:

Be at least 20 years of age;

Hold a valid full driver’s license in Australia;

Be listed as an insured driver for the vehicle which plans to drive.

The applicant needs to provide the student or staff ID of DEAKIN to register

and upload the relevant documents to meet the above conditions, which are

reviewed by my company's customer service staff. The user can use our

products as the SHARIDE driver after the approval.

4.2.2 How to use our service?

Figure 7

The process can be divided into five steps:

Step one, passengers make an appointment to call a car-sharing service

through SHARIDE APP, and the private car owner receives and confirms the

order from APP;

Step two, the car owner and the passenger travel to destination, the charge is

settled at the distance and automatically deducted from the passenger's credit

card;

Step three, SHARIDE company charges 10% of the transaction cost in this

order, after that, the balance is transferred to the driver's bank account;

Step four, the order is completed, and the passengers and drivers will

comment on the trip.

4.3 Risk management

In the growing market, risk management as an important link promotes the

close cooperation between operators, government and enterprises (Franzetti

2015). The practicable insurance coverage and active risk management can

improve business profit, which is significant to a start-up company. SHARIDE

in the initial phase will face to regulatory risk, operational risk and financial risk

in daily operations.

4.3.1 Regulatory risk

As a new concept, the laws and regulations about car-sharing are very scarce

in Australia. Since 2015, Canberra, New South Wales and Western Australia

governments have announced the legalization of Uber, however, it does not

include Victoria area. The car-sharing system has no detailed legal rules in

the state, but with the development of a similar sharing system, the

government might impose regulations in the future to regulate the services.

Therefore, the company needs to keep an eye on the changes of regulations

and make corresponding decisions timely.

4.3.2 Operational risk

SHARIDEuses real-name registration and a rigorous evaluation system to

avoid risk, nevertheless, there still are some security risks in university share

riding. Due to limited start-up capital, the campus will not be able to provide

insurance for users. We promise to provide relevant services as soon as

possible when the company makes profits.

4.3.3 Financial Risk

In the first year of operation, only a handful of companies providing car-

sharing services were able to be self-sufficient, so in the first year, the

company was at risk of financial imbalances. This is a significant risk, whether

the existing capital of the enterprise can maintain the daily operation of the

company in the first year. Under the support policies of Australia government

for small businesses(Business 2017), we decided to apply for $20,000 of

Small Business grant as a risk reserve to ensure the daily operation of the

company's first stage.

5. Finance

5.1 Startup Costs

Since our opening fund is only $20000, the business is defined as a small

business by the Fair Work Act (Government 2015) in Australia, which with

fewer than 15 employees. It is wise to cut down unnecessary costs to make

an efficient use of the start-up funds.

Firstly, the cost of registration as a small business is necessary. According to

the rules of Australia Taxation Office (Office 2017), The fee of register a

business name with ASIC is $34 for one year and $82 for 3 years. Licence

and permit Application of an Australia Business Number (ABN) do not have a

fee here, intellectual property (IP such as patents and trademarks) are free

since October 2016 (Australia 2016). Besides, there is also a few costs for

setting up website and services, matching the Apple App Store fee of

$99/year. Google Play has a one-time fee of $25 (Tim 2012).

Secondly, fees for services like accounting consultant and insurance costs

based on market research prices are expected to be around $7500 for the first

year.

Finally, all the office facilities such as phones, computers and printing for

dealing with the operating issues would come to $3800. The total start-up cost

is expected to be $12,844.

START-UP COSTS Cost ($) EQUIPMENT/CAPITAL COSTS Cost ($)

Business name 　 82 Computer equipment 　 2600

Licences & Permits 　 0 Computer software 　

AppStore $ Google Store fee 　 124 Office Phones 　 600

Domain names1 　　13.99 Stationery & office supplies 　 600

Trade marks/designs/patents 　 0 　 　

Accountant fees 　 1000 　

Phone & Internet connection 　 960 　

Insurance 　 6500 　

Printing 　 15 　

Marketing & advertising 　 360 　

Total start-up costs 　 9054 Total equipment/capital costs 　 3800

Figure 8

5.2 Maintain-operating costs

The costs will mainly occur during the first operating year, contains only

normal costs which exempt from emergency issues or unnecessary costs.

Since SHARIDE is funded and operated directly by 5 people with a

partnership relation, the salary is not fixed but depends on the annual

revenue. To this extent, we do not have the pressure of red budget on

employees’ salary.

Moreover, coupons and the corporation costs with other marketing partners

such as DUSA and food shops near the campus are expected to be within

$3000 a year. It is also necessary to open a business bank account for all the

1InterNetX 2017, EXTENSIVE DOMAIN PORTFOLIO PRICE LIST, URL:< https://www.internetx.com/en/domains/autodnsdirect/>.

revenues and in-apps transactions which will have a management cost of $50

per year.

As so far, the total budget could be covered by the initial opening funds

$20,000. And we have around $4000 spare capital for emergency use.

5.3 Main Revenue

Our main revenue will be generated by the 10% agency fee from each ride

transaction within our app. Estimating the market size for the app idea is

important for us developers to calculate the revenue, there are 5 steps to

draw a profitability estimation (Promatics 2017).

Firstly, identify the target audience – students and staffs of Deakin University.

Secondly, define the volume of target people. There are around 26,000 on-

campus students and 1500 staff in Deakin Burwood campus (Deakin

University, 2017). Thirdly, determine the circulation of product. It is obvious

that the using frequency will change according to the trimester period. The top

busy period should be trimester 1 and 2. More importantly, it has a small risk

of out of date because there will be new students joining in the app to be new

users every trimester and every year. Thus, the quantity of average users is

expected to be comparatively stable.

Fourthly, calculate the market size of the app. There are 3441 car parking

bays in Deakin (Deakin University, 2017), assuming that every week day

there are 1/10 cars that using the app to share their fees at the beginning

operating period, although there will be part of students driving to campus on

weekends and there might be other sharing rides from the surrounding stores,

the portion is a conservative estimation which allows a potential size growth.

Finally, apply the size to estimate the value. Assuming the average revenue of

each ride is just exactly the minimum charge of $3, then the profit will be:

$0.3*344 ＝ $103.2 each day. And the profit for the first month will be:

$103.2/day * 22 weekdays = $2270.4 at least.

The market share is expected to expand after 3 months (or one trimester) and

become stable after 6 months. The monthly revenue has a high probability to

reach $3000 according to the conservative estimation above. In general, it

can be reasonably expected that SHARIDE could generate at least $2270 * 7

normal months + $3000 * 3 busy months= $24,890 for the first year.

5.4 Additional revenue

Another portion of revenue will be generated from the in-app push

advertisements which will only appear at each time the user opens the app to

guarantee a good feeling of the using experience.

Assuming that the overall average ads reading frequency is 200 times per

day, we charge $0.05 for every 10 views of the ads (which is the half price of

YouTube). Then the revenue will be 200*365/10=7300 units multiplied by

0.05, which is $15,365 for a year.

Profit items (/year) Amount ($) Cost items (/year) Amount ($)

Main revenue from 10%

agency fee

24,890 Start-up preparations 9054

Additional revenue from

adds

15,365 Equipment/Capital Costs 3800

Maintain-operating costs 3050

Total 40,255 15,904

Figure 9

The closing balance for the first year is expected to be $24,351 excluding tax.

5.5 Financial outlook

The business will be set up at Deakin Burwood campus and provide service to

staffs and students around there. When it expands to create the profit, we will

extend to companies and colleges in Box Hill, Burwood East and Ashwood

even around Melbourne CBD in the future. For each section, it is expected to

generate dozens of thousands profit in the future years. The key to financial

success is to keep up with the demand trends and seize the advantages of

online and in-apps business.

6. Future prospects

In the future, SHARIDE has the ambition to become a leading enterprise in

this industry.

For the internal environment of a business itself, SHARIDE will expand its

business by interacting more with DUSA, we can help DUSA to advertise the

club related information and the DUSA can promote SHARIDE for its

members. This win-win collaboration is beneficial for each other. Of course,

some events like social gatherings is very welcome for students, by holding

social gatherings students can have much more chance to make new friends

and share information. This will enrich students’ life in Deakin University.

Furthermore, the franchise fee is also a big plan of our future, by collecting

franchise fee from our customers, the SHARIDE will obtain a further

development.

For the external environment, there exists a big chance that SHARIDE will

expand its business to other universities in the Melbourne like the University

of Melbourne or Monash University. This will attract more potential customers

to us. If the business goes well in Melbourne, we will expand the business to

other cities in the Australia as well as global business in other countries, since

the globalization is one of the megatrends (Bartsch, Riefler & Diamantopoulos

2016). SHARIDE will customize business for each university based on the

experience of operating in Deakin University, so the optimized experience for

customers can be guaranteed. What’s more, as SHARIDE is the first share-

ride business within the Deakin University which means the business is in the

‘blue ocean’ currently. There might have some competitors in the future, no

matter the new-established company or the company like Uber. So, some

scenario planning for the future competition is necessary. The SHARIDE

might collaborate with BUPA in the future if it is necessary. Most remarkable,

taken into consideration the significance of global trends of sharing, it is

crucial for SHARIDE’s future success with actively adapting to the chance-

growing global economic environment.

7. Conclusion

In this report, we developed a business idea of SHARIDE which is an online

service platform for college students and staff. Through a discussion on its

business background, market environment, operating structure, financial

analysis and external & internal developing trends, we could get a general

idea of the survival ability of the business.

Those elements above are crucial factors that affecting one business’s

development throughout its life, a success commercial people should get an

adequate ability to apply the analysis knowledge to the business running

practice.

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9. Appendix: